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Kyrgyzstan: NGOs Say IFC Fails On Mine Project

A key criticism leveled against the World Bank by protesters in Prague this month is that the bank funds projects without enforcing its own rules on environment or public disclosure. The charges are illustrated by the handling of a 1998 toxic spill in Kyrgyzstan by a private mining firm that received several millions of dollars in loans from international institutions -- among them the World Bank's International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD).

In this first part of a two-part series on the bank and its role in preserving the environment, RFE/RL's Ron Synovitz focuses on the Kyrgyz mine and allegations by non-governmental groups (NGOs) that the bank has failed to enforce its own standards on transparency and the environment.

Prague, 22 September 2000 (RFE/RL) -- Natalia Ablova has spent more than two years trying to learn the truth about a spill of sodium cyanide into Kyrgyzstan's Barskoon river by a Canadian-owned mining firm called the Kumtor Operating Company.

Ablova, the head of an NGO in Kyrgyzstan called the Bureau for Human Rights and the Rule of Law, started petitioning the firm for information shortly after a company truck crashed in May 1998 and spilled two tons of the toxic substance in the mountain river.

The firm and a British NGO hired to assess the damage say the long-term impact is not as bad as initially reported. But Ablova says the mining company continues to deny requests for information -- including the British NGO's analysis.

"Our biggest concern is that we cannot make a judgement concerning environmental pollution from the information provided by the company. The problem is that we do not know if their reports are good or bad because we don't receive the information we request."

Kalia Moldogazieva from the Kyrgyz NGO "Human Development Center-Tree of Life" says she also has repeatedly been denied information about the spill. After complaints by NGOs to the World Bank Group and the EBRD, the IFC this summer sent an ombudsman to Kyrgyzstan to mediate with mine officials. Moldogazieva says the visit led to promises for more openness. But the Kyrgyz NGOs are still waiting for the information they've requested.

"After a letter from several environmental NGOs to the EBRD and the [IFC] ombudsman, the situation has improved. The company has agreed to provide information. But the future will show if they will stick to their promises."

Jozsef Feiler, a researcher with an NGO called Bankwatch Network, says the problems faced by the Kyrgyz NGOs are common with projects financed by the World Bank Group.

"If the bank and similar institutions would follow their own internal guidelines -- like environmental rules or other public disclosure rules -- then there would be far fewer problems. We believe they are very far from this point."

Feiler says independent mining experts from the United States who were invited by the Kyrgyz parliament to visit the Kumtor site also have been refused access by the mining firm.

"The private company is backed financially by the IFC and the EBRD. These are public international financial institutions which have their own rules, and their projects should sustain a certain standard of quality. If the project doesn't meet this standard, they should reject financing for it."

Feiler says the lack of an adequate Emergency Response Plan initially led mine staff and Kyrgyz authorities to act in panic -- resulting in late notification of the public and inappropriate measures to neutralize the toxic effects of the spill. He says the secretive behavior of the mine violates the World Bank's rules on transparency and is fueling public suspicions of a cover-up.

Johannes Linn, the World Bank's vice president for Europe and Central Asia, says a forum has been opened to improve communications on the Kumtor issue. But he admits that Bankwatch and the Kyrgyz NGOs are not yet satisfied.

"There is a process of intensive consultation underway. From the NGO perspective this problem has not been fully addressed. And so I believe the IFC and EBRD will very much continue discussing that."

The bank is acknowledging the increasing importance of the environment in its funding plans. This month, it unveiled a new plan to integrate environmental needs into its funding projects and to shift its environmental focus further to the east, to countries like Kyrgyzstan, where the need is greatest.

(Part 2 of this series focuses on the new World Bank plan)